Private household financial assets: the golden days of the past are a long way off

Private households around the world suffered savage blows to their savings in 2008, the likes of which have not been seen for many decades. How quickly and sustainably private households can recover their financial losses will depend largely on the extent and length of the recession, especially since unemployment and a fall in disposable income will also limit savings potential. This report by Dr. Renate Finke, Senior Pensions Analyst at Allianz Global Investors, examines the issues.

At the end of 2008, the gross financial assets of private households in the USA totaled EUR 29.6 trillion compared with EUR 35.8 trillion in 2007 – a loss of 17.4%. This loss was considerably higher than in Western Europe where savings fell from EUR 25.5 trillion to EUR 23.5 trillion, a loss of “only” 8%. The smallest decline experienced by the countries under consideration was in Japan with 5.5% (EUR 9.5 trillion to EUR 9 trillion).

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